Insuarance

INSTITUTE OF MANAGEMENT AND STUDIES

FINANCIAL MANAGEMENT

ASSIGNMENT

Guided By- Submitted by: Prof. Kapil sharma Lovleen Khatwani

(MBA (FA) 2nd semester)

Q1. State the difference between pure risk and speculative risk?

S.No. | BASIS | PURE RISK | SPECULATIVE RISK |

1. | Meaning | Pure risk situations are those where there is a possibility of loss or no loss. There is no gain to individual or the organization | Speculative Risks are those where there is a possibility of gain as well as loss.  |

2. | Insurable | Pure risks are generally insurable. | Speculative risks are not insurable. |

3. | Risk pooling |  The conceptual framework of the risk pooling can be applied to the pure risks,  | It is not possible in most of the cases of speculative risk. |

4. | Advantage to economy | Pure risks like uninsured catastrophes may be highly damaging. | Speculative risks carry some inherent advantages to the economy or society at large. |

5. | Control | Pure risks are out of person’s control, in that people do not intentionally put themselves in a situation that is all downside and no upside. | Speculative risks are the downside of choices one knowingly makes that also have upside. That is it is risk under control. |

6. | Nature | Pure risk can be personal, property or legal. | Speculative risk are generally...